How Solar Panel Cost and Efficiency Changed Over Time

Contrary to popular belief, solar power technology has been around for a while. It has had several upgrades throughout time, making it more economical and effective for both households and businesses. The journey for harnessing energy from the sun started much earlier, in the 1800s, even though major developments for household use have mostly happened in the last few decades. The extensive use of solar energy in the modern world was made possible by these advancements.

How did the technology progress?

Up until Albert Einstein's 1904 publication, which made the photoelectric effect proposed by Stoletov known to the American scientific community, solar power remained mostly unknown.

Bell Laboratories would go on to create the first contemporary photovoltaic cell more than 50 years later. Although the efficiency of these cells was much below what would be required for home or commercial applications, they proved to be useful in enhancing space exploration, another fascinating technical advancement. Following its flight in 1958, the Vanguard 1 was the first spacecraft of many to come to employ solar power as a backup power supply thanks to advancements in solar technology.

How did solar power make it to homes?

Progress in solar power technologies persisted during the 1960s and 1970s. Efficiency had increased and installation costs had dropped by the 1990s, at which point home use began to gain traction. In the US, solar energy has grown significantly in popularity as a sustainable energy source since costs fell sharply in the 2010s. The US generated enough solar energy by 2021 to power 17.7 million households.

How did the efficiency of solar cells develop over time?

To put things in perspective, the efficiency of the solar cells created at Bell Laboratories was around 1%. The most expensive and advanced technology was utilized in the cells that were employed in the Vanguard 1, which functioned at about 10%. Today's homes frequently utilize mono and poly solar panels, which have an efficiency value of 16–23%.

What is Solar Panel Efficiency?

The capacity of a solar panel to transform sunlight into useful power is measured by its efficiency. Under ideal circumstances, 20% of the sun's energy will be converted to solar energy when it shines on a solar panel with an efficiency rating of 20%. When two identically sized solar panels with varying efficiency ratings are exposed to the same quantity of sunlight at the same time, the more efficient panel will generate more electricity than the less efficient panel.

A solar panel's total efficiency rating is determined by the total efficiency of its individual silicon solar cells. That number is affected by the silicon crystal's structure and type (usually monocrystalline or polycrystalline), electrical setup, and surrounding solar cell components.

Higher-efficiency solar panels are usually more expensive, but depending on your energy requirements and roof layout, they can be worth it.

Tracking Solar Panel Efficiency

Though it has taken a while, solar panel efficiency is currently increasing. See how significant the last several years have been for solar innovation overall:

• 1960: Hoffman Electric produces PV cells with 14% efficiency.
• 1992 saw the creation of a 15.89% efficient thin-film cell by the University of South Florida.
• 2012: 17.8% efficiency is reached by Solar Frontier.
• June 2015: 18.2% efficiency break for First Solar
• October 2015: Panasonic reports 22.5% efficiency while SolarCity reports 22.04% efficiency.
• SunPower's 22.8% efficiency was confirmed in November 2015 by the National Renewable Energy Laboratory (NREL).
• In January 2016, 29.8% efficiency was attained by NREL and the Swiss Center for Electronics and Microtechnology (CSEM).
• July 2017: A team of American scientists creates a 44.5% efficient solar cell prototype.
• In April 2020, scientists at NREL created a 47.1% efficient six-junction III-V solar cell.

The Decreasing Cost of Solar Panels Over Time

In 2009, more than ten years ago, the cost per watt for installing solar panels was $8.50. The solar business of today is substantially different: in addition to raising the efficiency of solar panels, manufacturers have made considerable improvements to their manufacturing methods. Ten years ago, solar installers could not have deployed solar PV as effectively across the United States as they do now. As a result, solar energy is now only $2.77 per watt, a substantial decrease in cost.

Solar panel cost over time

One of the main reasons people are becoming more interested in installing solar panels is the fact that prices have dropped over the last 10 years.

Swanson's Law, which asserts that the cost of solar PV modules drops by around 20% for every doubling in global solar capacity, helps to explain changes in the price of solar panels over time. The law bears Richard Swanson's name, who founded SunPower, a company that produces highly efficient solar panels. It points to widespread phenomena observed in many different technologies: when new sectors advance, costs decrease due to a substantial learning curve.

Manufacturers of solar panels and computer systems are similar in this sense. Consider how much less powerful and more costly your laptop was in 2009 compared to what's available today. It's not difficult to imagine a time when solar power is installed on every rooftop if solar PV technology keeps on its current trajectory.

What are the Most Efficient Solar Panels in 2024?

SunPower provides the 22.8% efficient residential solar panels available today. They are the most expensive, but if your roof has a lot of shade or little room, they can be worth it. If so, you might be better off selecting one of our list's other extremely effective but more reasonably priced solar panels.

The most efficient solar panel brands, compared

Brand	Model	Efficiency	Average Cost*
1. SunPower	M series SPR-M440-H-AC 440 W	22.8%	$24,413.54
2. REC Group	Alpha Pure-R 430 W	22.3%	$19,728.15
3. Panasonic	EverVolt HK Black Series 410 W	22.2%	$22,145.92
4. Maxeon Solar Technologies	Maxeon 3 BLK-R 420 W	22.2%	$21,813.97
5. Jinko Solar	Tiger Neo N-type 54HL4R-B 440 W	22.02%	$17,875.14
6. Silfab Solar	SIL - 420 BG 420 W	22%	$20,261.20

Do You Need to Get the Most Energy-Efficient Solar Panels?

Choosing energy-efficient solar panels is crucial, but you don't necessarily have to go with the most energy-efficient kind. In the following scenarios, using the most energy-efficient panels makes sense:

1. Your goal is to increase your solar production.

It's feasible that you want your system to generate the most electricity possible. Alternatively, if you have a small roof, you could choose to purchase the least amount of power from your provider. The most efficient solar panel should be used in any of these situations.

2. You will save money with solar panels with higher efficiency.

Solar panels with higher efficiency levels typically have higher costs. On the other hand, you will generate more power and reduce your electricity costs more if your panel has a better efficiency.

When using high-efficiency solar panels, you should determine if the higher initial cost of your system is justified by the greater savings you would experience over time.

Solar Savings with High-Efficiency Panels

Let's look at two Californian solar power installations. The 20 solar panels on each are the same size. SunPower M-Series 440 W panels with an efficiency of 22.8% are used in one system, while panels with an efficiency of 21% are used in the other.

	System 1 (Sun Power)	System 2
Panel efficiency	22.8%	21%
Number of panels	20	20
System size	8.8 kW	8.1 kW
Annual electricity production	9,680 kWh	8,910 kWh
System cost after the federal tax credit	$21,500	$16,216*
25-year electric bill savings**	$96,300	$88,600
25-year net savings	$74,800	$72,384

In the example above, after considering your upfront costs and your 25-year electric bill savings, you'd save $2,416 more overall with the SunPower system over 25 years.

What Determines Solar Panel Efficiency?

A panel's ability to convert sunlight into electricity is determined by more factors than just its structure; we have already discussed the fundamentals of monocrystalline versus polycrystalline panels and the effects of each material design on efficiency. That being said, efficiency is only one aspect of assessing a solar panel's performance.

Solar cell reflection

The efficiency of a solar panel will be reduced if light bounces off of it. Light reflection is decreased by the glass layer covering solar panels and the anti-reflection coating on solar cells.

Solar cell wavelength/frequency

All of the visible and infrared light that the sun emits is composed of particles known as photons, which vibrate across a broad frequency range. Depending on their frequency and wavelength, certain photons of light are absorbed, while others are reflected when they strike a solar cell's surface.

While some of the light that is absorbed may be converted to heat, the photons that are still able to pass through contain the energy necessary to free electrons from their atomic bonds and create an electric current. The higher the efficiency of a solar panel, the wider the range of photons (infrared, ultraviolet, and "visible range") that it can absorb.

Wiring and busing

The arrangement of a solar panel's busbars, or the cables that link the solar cells, affects how well the panel captures and transfers energy.

Inverter efficiency

To convert the direct current (DC) electricity produced by your solar panels into alternating current (AC) electricity—the kind used to run household appliances—your solar panel system needs inverters. A certain amount of thermal energy is lost by your inverter during this conversion. Its efficiency decreases with increasing losses.

Positioning and angle of solar panels

Whether your roof is 45 degrees or flat, facing the south, west, or east, solar makes sense for a lot of rooftops. If your panels aren't pointing straight south, or if their angle isn't quite correct for your latitude, you will lose some efficiency.

Shade

A single panel with a tiny shade on it might reduce the system's effectiveness. It's something that your installer must take into account and try to minimize. Learn more about shade and solar panels.

Temperature

High temperatures reduce the efficiency of solar panels. The temperature coefficient, which is shown on your solar panel's specification sheet, indicates how much less power it will produce for each degree over 25° C (or 77° F). For instance, if the temperature coefficient of your panel is 0.35%/°C, then its ability to produce energy will drop by 0.35% for each degree that the temperature rises over 25°C (77°F).

ClimateYour solar panels' effectiveness might be affected by your location and local weather. More than five cm of snow buildup on the solar panel causes the cells to fail. Dirt and dust can have comparable effects. On especially windy days, there may also be slight drops in efficiency.

What's The Most Efficient Type of Solar Panel?

What matters most in a panel is the kind of solar cells it utilizes. You want solar cells that are monocrystalline. Since all of them are made of a single silicon crystal, they are extremely effective in producing power. When monocrystalline panels are bifacial, light is absorbed on both sides of the cell, increasing efficiency. A few monocrystalline panels use multijunction technology, which allows them to absorb various light wavelengths and hence boost efficiency.

Polycrystalline cells are another type of solar panel that is made up of many silicon crystals that have been fused together. Although these panels are less expensive than monocrystalline ones, they are usually less efficient.

Though they are the least efficient panel technology, thin film solar panels are affordable, lightweight, and flexible. However, because of their adaptability, they work well for DIY or non-rooftop applications, such RVs and smaller appliances.

Where To Find High-Efficiency Panels?

Remember that while choosing solar panels, there are other important factors to take into account than efficiency. Get in touch with Forme Solar, and we'll send you a proposal that allows you to confidently make the switch to solar power by comparing solar panels based on a number of criteria, such as price, power output, efficiency, and warranty. Get in touch with your very own Energy Advisor right now. They will assist you in locating the ideal solar panels for your house.